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George Acs  

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  • Unappreciated Until It's Gone [View article]
    The key is to have a stable of potential stocks spread across sectors especially in markets that tend to have a unidirectional move higher.

    You may have noticed that in a number of articles during the climb I referred to looking to add stocks from among those that had under-performed from a given time point.

    This particular market seems to be characterized by lots of rotation with sectors falling in and out of favor.

    In a flat or downward moving market it's very common to be able to buy back the same stock after assignment, often the very first day of trading after assignment. That's not as easy with a higher moving market. It was entirely serendipitous that I was able to repurchase my shares of MetLife today that were assigned early last night. I wasn't counting on it, but I was counting on finding a replacement from among a list of "go to" stocks.

    Those are past stocks that you have followed or owned and that had fallen out of favor. It may be their time again.

    Finally, if you've been investing for a while you know that markets like this don't come along very often. While it's hard keeping up in such markets, it typically calls for shorter term option contracts and seeking lots of dividend captures in addition to the premiums. In a down or a flat market you can be flat-lining yourself and still beat the index.
    Nov 6, 2013. 03:49 PM | Likes Like |Link to Comment
  • Facebook Before Earnings [View article]
    But you applied new properties to those items, such as suggesting that I had said that "earnings reports are of no value in moving a stock up or down." That can only be a mis-interpretation or a projection based on what you perceive to be a logical conclusion, such as being a bored academic.
    Nov 6, 2013. 02:44 PM | Likes Like |Link to Comment
  • Facebook Before Earnings [View article]
    Given the existence of extraordinarily low volatility and subsequently relatively low option premiums I continue to like my performance against the S&P 500 in the face of a 23% gain in the index YTD.

    The greatest success with any strategy is not leaping from strategy to strategy to chase a belief that may shift with the winds. Rather, a covered option strategy can be modified on the basis of strike prices, portion of shares covered and stock selection (taking advantage of clear sector rotations through the 12 months of the current rally) to reflect bearish or bullish sentiment.

    If that pattern continues, as you now believe it will, I'll continue being happy to pursue a covered option and won't find the need to close shorts and potentially be put at risk for reducing ROI for having done so in pursuit of the dream.
    Nov 6, 2013. 07:30 AM | Likes Like |Link to Comment
  • Facebook Before Earnings [View article]
    You make some errors in logic or perhaps interpretation. For example, agreeing that financial information is manipulated and self serving does not lead to the conclusion that they are of no value in moving a stock up or down.

    Simple observation could include the conclusion that earnings reports, flawed as they may be, do indeed move specific stocks.

    They clearly do move stocks, however, there is no validity toward using the data to predict in what direction or magnitude those moves will be. Perhaps the lack of predictable movement is related to the perceived validity of the data, or perhaps it is due to the elusiveness of defining human behaviors that may be fueled by fear or greed at any given moment.

    The observational information to which I refer is predominantly past share price. I tend to be agnostic to the events that may have historically moved a stock's price, although I do consider them prospectively. I simply accept that data for what it is; a reflection of the past that may offer some guidelines for near term action based on historical behavior and comparative behavior as measured against a standard.

    Within that broad guideline is a need to compare alternatives and attempt to assess comparative returns relative to comparative risks.
    Nov 5, 2013. 05:48 PM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]
    I was a long term investor on the majority of my portfolio up until about 6 years ago.

    I was fortunate in having had an excellent broker, who had discretionary trading rights.

    While I never micro-managed I always kept daily track of performance and for years wondered why we didn't take profits more regularly as I watched the same shares go up and down over and over again. On a work related roll-over I decided to manage that portion myself, putting into practice what I had been at first simply observing and then methodically tracking, rather than rolling it into the buy and hold managed accounts

    When my broker unexpectedly passed away I decided to go my own way and implement the covered option strategy that I was using on a much smaller portion of my portfolio on it all.

    Its been through meltdown markets, up and down markets and higher markets with a predominantly short term holding period and little to no use for the details usually used in making investing decisions.

    It can work. Best of all, I remain blissfully unattached to any particular stock, although I designate some as "favorites," simply because of the frequency with which I've owned them. The real favorites are the ones that create out-sized cumulative returns through serial buying and selling (all also as part of a covered option strategy) without the need for a net gain in share price over time. See last week's article, "I Love Caterpillar" for an example
    Nov 4, 2013. 04:32 PM | 1 Like Like |Link to Comment
  • Unappreciated Until It's Gone [View article]

    I've never fully embraced the idea that as an individual investor it's entirely important to know levels of detail.

    I have no doubt that as encyclopedic as I might become about a single company the return for that effort would be small, as I would not likely discover insights unknown to others, nor what it give me any advantage over others. Additionally, the time necessary to devote to such an accumulation, understanding and interpretation of data would likely create an opportunity cost in limiting time available for other investing pursuits.

    I follow about 75 stocks. It's probably unlikely that could be done if there was a need for great depth. What I refer to as "following" is very superficial, at best.

    Since I'm no longer a long term investor I really am only concerned with known events on the horizon and past nature of price movement.

    Instead, I rely on casual observations that over time accumulate and are registered somewhere in my brain. I then try to see or foresee patterns.

    Seems to work reasonably well and keeps me off the streets, although my La-Z-Boy is well worn.
    Nov 4, 2013. 01:26 PM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]
    I don't get your point.
    I understand the use of "sic," but since I was the source it would be inappropriate for me to use the designation, although the editors could conceivably have used it as an indication that they were acting as transcribers, rather than editors. However, that would have undermined its use as demonstrating the point that immediately preceded its use.
    Nov 4, 2013. 08:06 AM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]
    Thanks, but I realized it should have been "onwee"
    Nov 4, 2013. 08:01 AM | Likes Like |Link to Comment
  • Facebook Before Earnings [View article]
    Very elegant, but very inexact. There is no correlation between the information provided by a company and its share performance in the short term. You state, as if was a matter of fact and reliably so "as demonstrated by the spike in price when those results were exceeded." If it was only that simple.

    Scientific methodology requires that for a diagnostic or predictive test to have validity, and the various market metrics are nothing more than such tests, they must attain a level of sensitivity and specificity and minimal false positive and negative alerts. In essence, there is no scientific methodology in the financial world that can be accepted, not that I don't accept it, as you state, but rather because it just doesn't exist.

    If such tools existed in the financial world I would accept their use. The standards to which you refer, the results issued by companies are entirely manipulated and self-serving bits of information, that can easily have wildly different outcomes depending on interpretation and application of accounting standards.

    Stocks are further held hostage by micro-economic and macro-economic factors, in addition to non-economic factors, as well and serendipity is also part of the equation that themselves can't be predicted. How often have you seen great earnings numbers being offset by having had the misfortune of being released on a day that the market is plunging or simply weak?

    But beyond that, retrospectively assessing such information has little value, as it has likely been fully discounted by the market. Placing your investments on the basis of prospective information is nothing more than gambling.

    I'll take my chances with observational information and processing such as a means to determine how to proceed when there is a fork in the road
    Nov 4, 2013. 08:00 AM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]
    TSLA isn't one that I follow, other than watching in awe.

    But purely on a glance at this week's option pricing the implied volatility is about 12% and you can get a 1% ROI on a strike that's about 17% lower, currently $135

    It looks as if it may have price support in the $134-$139 range, but it's hard to know, because its ascent has been so steep that there may not be much of a real resting point.

    In a very speculative portion of my portfolio I might be able to find some money to justify that trade.

    AS far as LLY and GPS go, I'm in the same boat along with you. LLY goes ex-div next week and I think that one will recover nicely. I'm disappointed with GPS and haven't been yet able to justify adding more shares.

    Although I don't own YUM right now, it has had a good history trading within a reliable range, although its premiums have been down a bit lately.
    Nov 3, 2013. 04:55 PM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]

    I agree somewhat with that opinion (the latter, of course), but have significantly changed my mind because of what options can do for you in navigating through the uncertainty.

    See "Turning Hatred Into Profits" for some of the rationale behind occasionally embracing earnings related trades.
    Nov 3, 2013. 04:43 PM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]
    Thank you. Now if only I could learn to listen to myself and not get tantalized by having cash to spend.
    Nov 3, 2013. 04:41 PM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]
    You're right. I should have more accurately said "no net movement in price." The ups and downs, without ever really going anyplace can create very attractive premiums.
    Nov 3, 2013. 04:40 PM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]
    Do you believe or do you know that to be the case?

    Nah, I was just testing you to see if you were using it. You didn't disappoint.

    Thanks. This time it wasn't uploaded to the server Just put it on.
    Nov 3, 2013. 12:22 PM | Likes Like |Link to Comment
  • Unappreciated Until It's Gone [View article]

    I think you're absolutely right (I mean about the "due" line being clever). I believe the logical conclusion is that if earnings are not accelerating rapidly then there is no recovery, especially if whatever earnings growth there is comes through cost cutting and not revenue expansion.

    A logician may not agree that the negative of the converse is necessarily true, but I think this one falls into the category of self-evident truths (once again referring only to the cleverness of the "due" line)
    Nov 3, 2013. 11:34 AM | Likes Like |Link to Comment